Embellishment of stores, highlighting of brands, advertising spending … Aldi takes the same path as its competitor Lidl and nibbles market share year after year.
“Make way for the new consumer”. Unless you live on a desert island, you couldn’t miss Aldi’s slogan. Hammered in radio ads, on TV, in the press, on the internet, Aldi’s slogan alone sums up the German discounter’s strategy for several years: to attract smart consumers to its stores and no longer just an impoverished clientele.
“It is clearly inspired by Lidl, summarizes Olivier Dauvers, specialist in mass distribution. Before, to do discount, stores had to be repulsive and not to advertise. Lidl has shown that the French no longer want discount Pauperizing. Aldi stepped into the breach. And they were right, otherwise they might not exist. “
A strategy in which the German discounter did not believe at all. When Lidl began introducing national brands and renovating its stores in the late 2000s, it was felt within Aldi that with this strategy Lidl was going straight into the wall. This is because the concept of hard-discount invented in Germany has changed little across the Rhine since its origins.
Price and quality
But it was not knowing the French consumers who want price certainly but also attractive stores, brands and quality products.
And like Lidl of old, Aldi has drawn a line on its origins.
“The concept of” hard “discount has never existed, assures Philip Demeulemeester, the manager of Aldi France in LSA. I have been fighting for years on this word which we have never claimed. On the other hand, Aldi is the inventor of the discount. The discount is a reduced range of 1,500 products […] the best product at the best price […] but it’s not a fixed concept. “
Aldi therefore began to move upmarket. By introducing national brands first in the mid-2010s (they now represent 10% of the assortment) and above all by getting a makeover. Gone are the sinister Aldi stores of the 90s with their beige tiling, their pale light and the products presented directly in the delivery boxes on pallets.
An advertising budget multiplied by … 2300!
Unveiled in 2018, the new store concept called Aniko (for Aldi Nord Instore Konzept) breaks with the frugality of the old points of sale. Brighter (the stores often have glass facades), larger aisles, colorful and perfectly legible signage, a store entrance devoted to bakery and fresh products, real furniture on the shelves (bye bye pallets … .) … The new Aldi stores (for which the group has spent 5.2 billion euros in Europe) now look like small conventional supermarkets.
In three years, Aldi has renovated more than 300 stores out of a fleet of 870. Modernization pays off. In three years, the brand has gone from 2% market share to 2.7% and is now targeting 4%. In 2020, the group is one of those which has made the most progress in France. Its turnover jumped 9% to 4.9 billion euros according to an estimate LSA.
It is that that year, Aldi made another departure from the discount strategy: he invested heavily in advertising. With the arrival of TV and the hype on the radio, Aldi has increased its communication expenses by … 230% according to Kantar. In 2020, Aldi would have invested in more than 210 million euros in advertising (public price before negotiations), which makes it the fifth largest French advertiser in mass distribution (far ahead of Système U, Auchan or Casino). By way of comparison, Aldi had spent in 2017 before his big change barely 93,000 euros in advertising, or 2300 times less!
And to forge an image of a trendy sign, Aldi does not hesitate in his latest TV spot called “We can not please everyone” to show real tweets that criticize it (in the middle of positive tweets all the same ): “ALDI is too bad”, “At ALDI, you have the impression that it is up to you to put the products on the shelves” … Result: in two years, the chain has almost doubled its notoriety from 16 to 30%.
Renovated stores, colossal pub budgets … Enough to grab a few precious tenths of market share points. But Aldi wants to go higher and faster. And for that, the group did not hesitate to write a big check for 683 million euros to Casino to afford 547 Leader Price stores. With 1,400 stores by the end of the year, Aldi can now titillate its great rival Lidl, which currently has 1,631 points of sale.
“Internal growth is taking place at a much slower rate, explains Philip Demeulemeester, the boss of Aldi France. Thanks to this takeover, we immediately reach a significant number of stores. In Paris, for example, we had in this way. at the start of the year only one store and we will have twenty by the end of the year. “
Aldi, which opens less than fifty stores per year, has thus gained 10 years at once with this takeover. More than half of the Leader Price stores have already been transformed into Aldi and by the end of the year, the entire fleet of 547 purchased outlets will be under the blue and red banner. And the group, which ultimately aims for 1900 stores in France, ensures that it is on the lookout for new external growth operations.
“Who hasn’t copied who?”
Until then, there is no shortage of construction sites. And to see Aldi’s future, it is undoubtedly from Lidl’s side that you have to look. Its competitor has just launched its first loyalty card and is considering getting into the drive. Tracks which undoubtedly are studied closely at Aldi who fully assumes to copy.
“In mass distribution, who has not copied who ?, asks Philip Demeulemeester in LSA. Historically, everything started because Aldi invented the discount. It is part of the business. We are not frozen in the face of competitors. They listen to customers, and so do we. The difference with Lidl is that we are Aldi! “
A difference that no longer depends on much.
“The difference between the two is that there is yellow on Lidl’s logo not on Aldi’s, quips Olivier Dauvers. But knowing how to copy is a quality and Aldi’s success proves it.”
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